Bakery Contract Manufacturing Market Size, Share & Trends Analysis Report By Service (Manufacturing, Packaging, Custom Formulation And R&D), By Region (North America, Europe, APAC, CSA, MEA), And Segment Forecasts, 2022 - 2030

Report Overview

The global bakery contract manufacturing market size was estimated at USD 19.3 billion in 2021 and is anticipated to expand at a compounded annual growth rate (CAGR) of 9.5% from 2022 to 2030. The changing lifestyles, coupled with a growing middle-class population and increasing disposable incomes, are likely to drive the demand for baked goods thereby complementing the market for bakery contract manufacturing. The COVID crisis impacted the entire food supply chain, which is one of the most important aspects of any economy, right from the farm to consumers. The pandemic impacted the labor movement, consumer demand, and bakery production facilities. It also affected food-trade legislation that restricted food trade, resulting in financial constraints in the food supply chain.

When the pandemic broke out in early 2020, the food and beverage sector focused more on sanitary conditions and food safety. The Food and Drug Administration (FDA), which regulates food in the U.S., issued new recommendations on food and beverage manufacturing operations and intensified its inspection of food packaging and distribution. Companies in the bakery contract manufacturing industry are implementing automation to ensure uniformity while also increasing productivity and efficiency. Technology is the driving factor behind small-scale, localized industrial food makers, proving how they can carve a niche alongside the ongoing expansion, resulting in large-scale manufacturing.

It is anticipated that the increased demand for fast food and packaged food would encourage manufacturers to increase their production capacities, consequently increasing the demand for baked goods throughout the projected period. In addition, the rising prominence of commercials with appealing images and the availability of a broad variety of tastes in baked products are expected to have a beneficial effect on the demand for processed food and consequently, bakery contract manufacturing. The crisis in Ukraine, in all its aspects, is having worrisome cascading implications on a global economy already battered by COVID-19 and climate change, with devastating effects on developing nations. Russia and Ukraine have a substantial influence on the international economy. This is because they are key providers of commodities on the international market. Growing prices of input raw materials in baked goods are expected to reduce profit margins thereby restraining market growth.

Service Insights

The manufacturing category dominated the market for bakery contract manufacturing and accounted for the largest revenue share of 67.5% in 2021. The rising adoption of automation technologies and robotics in the bakery industry enhances the quality of baked products, as well as the efficiency and productivity of contract bakers. Automation technologies help in reducing human intervention in the baking process, resulting in minimal chances of food contamination and the development of high-quality baked products. Increasing labor and energy prices worldwide, coupled with the rising costs of ingredients used in baked products, are anticipated to lead bakeries to opt for advanced bakery techniques or outsource their baking processes to improve their overall production efficiency.

The custom formulation and R&D category segment is expected to witness a CAGR of 10.8% in the market for bakery contract manufacturing over the forecast period owing to the increasing frequency of lifestyle-related diseases worldwide, which has resulted in growing awareness among consumers about the benefits of a healthy diet, which primarily consists of natural food and gluten-free products, thus augmenting the demand for bakery contract manufacturing. The prevailing trend of developing clean label products with signature flavors and improved texture and taste is anticipated to result in advancements in technologies used in the preparation of bakery products. The surging global demand for healthy baked products is expected to lead to an increase in research and development activities and custom formulation of new and healthy baked products. This, in turn, is anticipated to have a positive impact on the growth of the market for bakery contract manufacturing over the forecast period.

Regional Insights

Asia Pacific is expected to witness a CAGR of 10.3% over the forecast period owing to the rising middle-class population, coupled with their growing spending power and changing preference of the millennial population toward processed food products, which is expected to drive the demand for bakery contract manufacturing. Europe led the market for bakery contract manufacturing as it accounted for 28.8% of the global revenue in 2021 owing to health awareness among consumers, their dietary shifts, and changes in their preferences for nutritional food and beverages are some of the key trends witnessed in the food and beverages industry of Europe that are expected to augment the demand for product demand.

North America is characterized by increasing demand for processed food, growing immigration, and ongoing technological advancements in the bakery industry which are the key factors responsible for the growth of the bakery contract manufacturing market. Increasing vegan food preferences among the population are expected to have a positive impact on the demand. The food and beverage industry in Central & South America has witnessed significant growth in the past few years owing to large investments in the region’s manufacturing sector. Factors such as rapid urbanization and increased spending capacity of consumers in countries like Argentina, Brazil, and Chile have contributed significantly to the growth of the food and beverage industry.

Key Companies & Market Share Insights

Major manufacturers are witnessing increasing value chain consolidation. Additionally, businesses have begun to offer extra value-added services including packaging, R&D expertise, and storage, which has stimulated industry expansion. Additionally, the pandemic has brought attention to supply chain problems, which are anticipated to increase capacity. Bakery contract manufacturers have implemented innovative tactics that have created the potential for co-development. Bakery businesses are starting to embrace a modernized supply chain strategy that places production at the center and gives them a competitive edge. As a result, cross-border risks are reduced, and sales are increased. Some of the prominent players in the bakery contract manufacturing market include:

• De Banketgroep B.V.

• HACO Holding AG

• PacMoore Products, Inc.

• Blackfriars Bakery

• Southern Bakeries, LLC

• Cibus Nexum

• Hearthside Food Solutions LLC

• Perfection Foods

• Richmond Baking

• Oakhouse Bakery

• Adventure Bakery LLC

• Michel’s Bakery, Inc.

• Bake Works, Inc.

• Stephano Group Ltd.

• Tradition Fine Foods Ltd.

Bakery Contract Manufacturing Market Report Scope

Global Bakery Contract Manufacturing Market Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2022 to 2030. For this study, Grand View Research has segmented the global bakery contract manufacturing market report based on service and region:

• Service Outlook (Revenue, USD Million, 2017 - 2030)

  • Manufacturing

  • Packaging

  • Custom Formulation And R&D

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • France

    • U.K.

    • Italy

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Australia

  • Central & South America

    • Brazil

    • Argentina

  • Middle East

    • South Africa

    • UAE